In a 2-1 decision, a panel of the U.S. Court of Appeals for the District of Columbia Circuit found the government could not use a federal racketeering law to seek the huge penalty.

The decision comes in the midst of a trial in U.S. District Court on the government's lawsuit contending that the industry knew about the health dangers of smoking but hid that information from the public.
The trial will continue while the government considers an appeal, reports Indianapoils Star.

"We are extremely pleased that the appellate court agreed with our long-held belief that disgorgement is not an appropriate remedy," said Charles Blixt, executive vice president and general counsel of R.J. Reynolds Tobacco. "This ruling dramatically transforms the DOJ suit."